Friday's unexpected decline in consumer spending is somewhat disconcerting in the wake of the negative GDP revision last week

Jay Soloff

Argonath Financial

Friday's unexpected decline in consumer spending is somewhat disconcerting in the wake of the negative GDP revision last week. Consumer purchases dropped 0.1% after climbing 1% in the prior month. That's the first decrease in a year. Adjusting for inflation, spending decreased by the most since September 2009. However, it's way too early to give up on the US economy. First off, the prior month's 1% spending increase was the fastest growth rate in 5 years, so it stands to reason that spending would cool off. Moreover, the biggest spending drop was in household outlays - which include utilities. As the weather warms towards summer temps, utilities spending is going to decline. What's more, personal income climbed by 0.3% in April. As long as incomes continue to rise, it will eventually result in more spending. (VIEW LINK)


Jay Soloff
Research Analyst
Argonath Financial

I'm an investments analyst for a US-based independent investment research firm. My focus is on economics, options, and all types of stocks, but especially tech, Internet, and renewable energy companies. I have experience as a options market...

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